U.S. December Personal Spending Rises 0.7%; Incomes Rise 0.5%
Because the increase in spending was more than the gain in incomes, the savings rate worsened to minus 1.2 percent, from minus 1 percent the prior month. A negative rate suggests consumers are dipping into savings to maintain spending.
``Households can't keep spending more than their income indefinitely,'' said Bill Hampel, chief economist at the Credit Union National Association in Washington. The more the savings rate falls, ``the more headwind it creates for consumer spending in the future,'' Hampel said.
Negative Personal Savings Rate - three commentaries:
John Merrill, investment manager
Joel Naroff, economist
Tony Proctor, certified financial planner
Proverbs 30:25, "The ants are a people not strong, yet they prepare their food in the summer"
"Go to the ant, you sluggard!
Consider her ways and be wise,
Which, having no captain,
Overseer or ruler,
Provides her supplies in the summer,
And gathers her food in the harvest"